Jamie Dimon, chairman and CEO at JPMorgan, sat down with host Stephanie Ruhle on Bloomberg TV’s new flagship morning program, Bloomberg <GO>. He discussed the reputation of banks following the financial crisis, his perspective on the Chinese economy, concerns over tech valuations, regulation, and his approach to dealing with the U.S. government to protect the bank and its customers.
Dimon said corporate leaders shouldn’t give earnings guidance because they can’t predict the future: “If I was a CEO don’t make earnings forecast! You don’t know what’s going to happen every quarter and I don’t even care about quarterly earnings. Let me say this just outright, I don’t care about quarterly earnings. I’ve never done anything for quarterly earnings. As a matter of fact our quarterly earnings are based upon decisions that have been made over the last 5 or 10 years. And by my predecessors.”
Dimon: Banks ‘Got Tarnished’ By Financial Crisis
Dimon: Took Steps to Prepare for Commodity Volatility
Dimon: ‘A Long Time’ Before China Overtakes U.S.
Dimon: I Am Not Going to Run for President
Dimon: Tech Valuations Are ‘A Little High’
Dimon: Impossible for Banks to Fight U.S. Government
Dimon to CEOs: ‘Don’t Make Earnings Forecasts’
On why bank CEOs don’t fight back against government fines, Dimon said: “It’s impossible for a bank to fight the United States government. And what you’re trying to do is minimize the damage to your company as best you can. You know the alternative would be to go to court, fight in 5 or 6 different courts, you know be dragged through the mud for years and you’ll still end up paying that kind of money.”
When asked about his future in politics, Dimon said: “I’m not going to run for president…just because you’re a good CEO does not mean that you’re going to necessarily be a good politician.
On China, Dimon said: “They’ve got huge issues. You know it’s going to be long time before they overtake America in any way, shape or form.”
On raising interest rates, Dimon said: “Normalization raising interest rates is a good thing. And it will actually reduce uncertainty.”
- Dimon: ‘Cery happy’ W/latest Quarterly Result
- More unified regulatory system needed in US
- ‘Impossible’ for banks to fight US government
- No change in us regulatory system next couple of years
- On Glencore: ‘Very talented and bright company’
- Tech valuations a little high
- Everyone seems to look for next black swan
- Raising interest rates will be a good thing; will eliminate unvertainty
- ‘A Long Time’ Before China Overtakes U.S.
- Wouldn’t want to go into government
- ‘I don’t care about quarterly earnings’
- CEO’s shouldn’t make earnings forecasts
- Still sees good opportunities in Africa
- Still supports Eurozone concept; sees lower growth in Europe
- Good investment opportunities in Europe
- Gained market share in some areas in Europe
- On running for office: ‘Absolutely no chance’
Bloomberg <GO> airs weekdays from 7-10am ET on Bloomberg Television and is also available for free on livestream: http://www.bloomberg.com/live.
STEPHANIE RUHLE: You are watching Bloomberg GO and we want to welcome all Bloomberg Radio listeners. With me now, Chairman and CEO of JPMorgan Chase, Jamie Dimon.
Jamie, welcome. Any day is a great day to talk to you. But today specifically. Last week when we got JPMorgan numbers we were actually saying, disappointing. But put it into context. What we got out of Goldman, the massive loss out of Morgan Stanley, and Credit Suisse and Deutsche restructuring, raising capital. What gives in the banking industry?
JAMIE DIMON: You know I was very happy with our results. We had like a 12% return on tangible common equity which is double what a lot of other people are doing. Market shares are up in almost every business. And you know listen we have vicissitudes. I think people overreact to short-term stuff. I also think when we compare actual results with estimates and the estimates are changing all the time, I don’t really actually care about that. To me it’s the banker’s shares, clients, are we gaining, becoming better every day? And I feel very good about where we are.
RUHLE: Well you’re gaining market share against your competition.
RUHLE: What are they doing wrong? When you look at what’s happening, Deutsche Bank over the weekend, a restructuring that massive, it’s like Anshu Jain’s entire power mafia out the door. How does that affect the way you think?
DIMON: Listen I, we compete with people around the world and I wish them the best. I want to make sure we do well. So we want to stay focused on serving our clients around the world. Consistent, we’ve been very consistent for years about how we go about doing that. We haven’t changed our strategies.
All the banks however are modifying their business for the new rules, which we have to do. And hopefully we’ll be able to do that without too much effect on our client business.
RUHLE: Are we at a risk of getting over-regulated. Hillary Clinton who seems to want to double down on Dodd-Frank, you’ve said hey Dodd-Frank cleaned us up. We’re all better for it. What happens if you get Dodd-Frank squared?
DIMON: Yeah I don’t think it’s just Dodd-Frank. There’s Dodd-Frank, there are FSB rules, there are Basil rules, there are interpretations of rules, there’s if you take all of it, some of the things are quite good. And some, I don’t agree with you know? And I’m not going to sit here and complain about them. They are what they are. I’ve been advised by my regulators, just deal with it.
And we’re just going to deal with it and take the appropriate actions. And I do think there may be some adverse consequences down the road–
RUHLE: Like what?
DIMON: And maybe one day it will be modified a little bit. You know too much capital, too much liquidity, too much rigidity in how a bank can function in bad markets. I think you see a little bit in market liquidity today. And you know JPMorgan’ll be fine. So I’m not complaining about JPMorgan. I just think some of these rules may have unintended consequences that we don’t see yet.
RUHLE: Specifically where? Would you say the high yield market? Because that’s where clients are saying, I’ve got no liquidity, you know, I can’t seem to find anyone to help me. Is that where you’re finding the toughest times?
DIMON: So let me say, the regulators would say as long as the system is safer it’s fine. And if you have a little bit more volatility and a little wider bid ask spreads. And there’s some truth to that. Where you don’t want to happen is that one day it really affects the primary markets and that somehow the financial markets reverberate back to the real economy.
And that’s why if I were a regulator that’s what I’d be focusing on. But absolutely lower bond inventory, certain regulatory requirements, are constricting people’s ability to make markets. And you see a little bit of that in the volatility in the markets.
You see a lot of it in what I call, the bid ask spreads are still kind of narrow sometimes. What you’re seeing is the breadth. Can you move $200 million of Treasuries? Can you move $100 million of Ford Motor